For sometime now, Credit Cards have been a brilliant way of clearing debt, rather than having to take out a loan which will charge you on the amount you have borrowed. However, there is another way where you can avoid these annoying charges; in fact it’s practically free and is known as Stoozing. There is fierce competition in the credit card industry that many lenders have introductory periods of between 3 and 18 months during which they charge 0% interest on the card balance (commonly known as 0% interest Balance Transfers). This is done as a way of attracting customers, for example 0% interest Credit Card from Natwest and 0% Credit Card from RBS, which both offer 0% interest for the first 9 months. Offers such as these allow us to borrow money for ‘free’ which we can use to pay off your debts or move into a high interest savings account.
You can take advantage of the 0% introductory period by withdrawing the money to pay off your debt, as long as you ensure that you pay of the minimum monthly charge that the lender will charge you. At the end of the introductory period, if you haven’t cleared your debt, you can then transfer the balance across onto another credit card, starting the process again. This can be repeated until your debt is cleared and the great thing is that it is virtually free, avoiding those pesky interest rate charges that you face with loans. Check out the Motley Fool’s guide to see the best 0% interest credit cards and high interest savings accounts.
Alternatively, you can move the money of your credit card into a high interest savings account. At the end of the 0% introductory period, the money is withdrawn from the savings account and used to pay off the full credit card balance. The interest gained from the savings account is your ‘profit’. As with any other savings account interest, taxpayers need to pay tax on the interest earned.
However, rather than paying off the credit card at the end of the period directly from the savings account, you can apply for another 0% credit card to pay off the first one. This gives us the opportunity to keep the borrowed money in the savings account for a considerably longer time.
Another way of making money from Credit Cards is to put the borrowed money into an offset mortgage instead of a savings account. This helps to reduce your mortgage payments, earning you money that is usually tax free. For a list of the best offset mortgages check out the Motley Fool.
Typical Stoozers normally earn between £400 and £2500 per annum from Stoozing.
If you are new to Stoozing it is important that you read the risks that are involved as this could affect your credit history. You need to keep up with the paperwork involved with stoozing.
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